The Portuguese property market has done spectacularly well over the last few years, largely because of the overwhelming interest from wealthy overseas investors. Real estate experts predict that home prices in Portugal, especially in regions such as the Algarve, will continue to rise. So, should you take advantage of this and sell your property in Portugal fast?
Or does it makes sense to buy property in Portugal online right now, when there is still time? It’s a tough decision to make, but what’s important is to do your research and stay informed about the current situation, before getting ahead of yourself.
Portugal suffered like any other country in Europe in the aftermath of the 2008 global housing crisis. Things weren’t pretty back then, as the government had to struggle with a balance of payment problem of its own. While the European Central Bank and the IMF did come to the rescue, they had many conditions to make, such as the imposition of wide ranging austerity measures.
So for a while, the property market in Portugal was depressed, and a lot of people were losing hope. Then, starting from 2013, things began to change quietly. This began with rich investors from emerging nations such as China and Brazil buying property in Portugal. This was unprecedented, as till then, the only foreigners that bought properties here were Britons, French, Germans and to an extent Russians.
That changed, and soon Portugal was to emerge as a leading overseas property destination in Europe. The Algarve in particular, was compared with Costa del Sol in Spain.
One might argue that buying a holiday home in the Algarve is preferable to buying one in Costa del Sol from the investment perspective. The Algarve is not as overcrowded with tourists as Costa del Sol, or for that matter, the Canary Islands, and does not have the same level of overdevelopment.
According to the financial database Trading Economics home prices in Portugal will increase steadily year after year and grow at 4.5% a year by 2022. That is significant; when you consider that the national economy grows at under 1% a year.
According to Nadezhda Yakimenko of the Cascais Real Estate Agency, “In Lisbon, construction and reconstruction projects have proliferated. The whole city centre has practically been renovated. Buyers are scooping up Lisbon apartments in new developments before construction is finished. Among the most popular properties are investment projects, which generate guaranteed tourist rental income, with typical yields of 4% per annum.”
Who are buying in Portugal? Foreign investors, of course. In Lisbon in particular, 90% of the buyers of homes and apartments are non-Portuguese nationals. Britons, Swedish, Brazilian, French and American nationals are amongst the biggest buyers here. The Chinese form a significant presence as well.
An overwhelming majority of the buyers – 73% – are over 55 years old. Lisbon Riviera and the Algarve are the most popular areas with foreign buyers. In recent years, a number of Irish, Dutch and German buyers have been snapping up holiday villas in Portugal. So things are looking pretty good in Portugal right now and long may it continue.